As electric vehicles are capturing the market, many investors are investing in electric vehicles and Cryptocurrencies. One such investor is Cathie Wood who made an extra purchase of shares in Elon Musk’s company, Tesla Inc., and Coinbase Global Inc.
Cathie believes that electric vehicles and Cryptocurrencies are the key sensations that will go forward in the future.
On Wednesday, a number of Ark Investment Management LLC funds, including Wood’s flagship Ark Innovation ETF, purchased nearly 75,000 shares of the electric automaker company and about 297,000 shares of the cryptocurrency exchange operator. The company has been continuing a buying binge that started in October, according to data collected by Bloomberg.
Image: Barron’s
Wood’s company Ark has continued its purchases of cryptocurrency company Coinbase even though crypto is under uncertainty after the collapse of FTX run by Sam Bankman-Fried. Coinbase shares fell extremely low on Tuesday before recovering slightly on Wednesday.
Cathie’s largest fund, ARK Disruptive Innovation Strategy, is down 60% this year, compared to a 28% loss for the Nasdaq 100 and a 16% decline for the S&P 500. The previous month, it repeated its $1 million -Target for Bitcoin, the biggest crypto token, presently trading at about $17,600.
To note, Tesla shares are at their lowest in more than two years amid a crisis about a possible recession, a tightening Federal Reserve, and founder Elon Musk’s actions to lessen his stake in the electric vehicle maker.
According to data from Bloomberg, Cathie’s firm is one of the biggest shareholders of Coinbase. The company holds a round 4.3% stake as of 30 September while her company owns only a 0.13% stake in Tesla although the stock is the main fund’s top holding.
As inflation hit hard, shares of Tesla dropped 2.5% in premarket trading on Thursday, and Coinbase also dropped 2.5%.
Tesla owner Elon Musk, this year, has made enormous investments mainly the $44 billion Twitter deal which cost him to sell off around or more than $15 billion Tesla shares to aid him with the contract of Twitter. Further, he disbursed $4 billion on the stock in November.
Moreover, he took billions of bank loans which is noted in the balance sheet of Twitter that mandates payment of interest.
Tesla and other supplies have been smashed especially hard by inflation and increasing rates. Musk has been urging the Fed to alter its hikes to evade an unbearable recession, and emphasized the risks of owning capital when rates are growing larger and the economy is deteriorating.
“At risk of stating obvious, beware of debt in turbulent macroeconomic conditions, especially when Fed keeps raising rates,” he said.